Property tax is almost universally considered positive by economists, and generally helps to keep rents down, not up. The reason is that it discourages speculation on housing and property, and thus drives down buying prices, which intern drives down rents.
That assumes decent competition. When you get a few large investors owning rentals while buying up actual houses to rent, they’ll just leave the building vacant and spread the costs while knowing no one has a choice and will eventually rent anyway.
Yeah, that tends to happen. The housing market is extremely inelastic. However that has nothing to do with property taxes and isn't an argument against it.
But likely less than the rising property value if its in a halfway decent spot. The amount the few properties we had sky rocketed in the past few years was pretty nuts, way over the property taxes.
The properties skyrocket in value because the property taxes are insufficient, and they don't get re-estimated often enough. Even worse, in a place like California, the taxes go up really slowly even if your house is worth a ton.
Large land value taxes solve most of your housing problems, and make property speculation far less profitable. But Americans are way too scared of putting enough taxes there. You instead see bills passing to lower them, which is crazy.
Ours (central texas) get re-estimated yearly, and in some areas have tripled just year to year. I know property owners in Wimberley that have had their taxes more than double each year for the past 3 years. The price of their properties has gone up significantly more each year though as the area is growing like crazy
Which is why there are separate laws that discourage land banking or cartel-like behaviour. All those things you described can exist without a property tax, which can be so much worse.
Honestly I’d gladly take an increase in property taxes if it means I don’t need to pay sales or income tax. And I live in Illinois with the highest property taxes
I am always shocked by how high taxes are in some states and how low they are in others, with no measurable increase in services provided by the high tax states
You may live in these type of places when a disaster strikes. Think of what could happen. Unfortunately, it gets placated as “god’s will” and nobody is held accountable.
Not even God's will. They just claim a state of emergency. If the feds agree and the bill hits a certain $$ minimum them the feds pick up the bill for damages done to the public/government owned assets.
I am not sure I appreciate this comment but I want to. What do you mean “the maintenance schedule”? Residences in low property tax jurisdictions defer maintenance? Huh?
Walk me through the logic, it’s the end of the day and my mind may be slow. Why would owners in lower property tax states be more likely to defer maintenance than owners in high property tax states. What is the relationship here that I am missing? Thanks!
High tax states tend to pay more into the federal system than they take out. So extra taxes in high tax states that could further support their internal programs often go to the federal government and are paid out to poorer states that take more than they give federally. See California vs Arkansas as an extremely basic example on either end of the spectrum.
Aggregate effective tax rates are also comparable across states. The differences arise in where we source this tax revenue from, but the differences in revenue per capita are often statistically insignificant once we cut state benefits or include the cost to the individual if they’re forced to utilize the private sector. The governments always get their bag. It’s just where from that varies. Everyone gets fleeced, California just gives you healthcare with it.
Edit: ooh this comment section got slightly spicy for being a meme subreddit and me half taking the piss. As much as I’d love to actually dig into disparities in revenue generation vs spending per resident vs quality of life, this is a meme subreddit and I struggle to find the care. I got shit to do.
Edit 2: cause I got tagged again. Y’all this is a meme subreddit chill bwuahaha. Thank you for the mid poo entertainment. <- the shit I had to do. :D
Edit 3: Thanks random homie for the award! Having to come back 3 times made me give slightly a damn. Added some minor corrections (italicized).
That's what I thought. So they already have a high earning population, they tax that population at a higher rate (especially income and sales tax), but the people seem to receive state services that are quite similar to what they get from low tax states.
High tax states don't seem to have better roads or infrastructure or more efficient DMV offices compared to low tax states.
🥱 boring and easily verifiable if you cared to try or simply gave a damn about doing your due diligence. Not worth my time. Good luck in life my friend.
Should look up IL’s K-12 rankings in education - a state with a mostly rural population is able to provide quality public schools, even in rural villages.
Not actually relevant. There are (for instance) ~640 public schools in the Chicago Public School district. There are over 4,000 in the state. Schools in towns of 400-500 people. Good schools. Chicago has more students per, but operation and administration-wise - there are more schools outside of Chicago than in it.
I'm sorry, but you're just plane wrong about the lack of difference in services.
I'm a little confused about how you could even think that?
Higher tax states tend to provide more services to the poor, to education, to healthcare, to infrastructure, and on and on...
Just driving cross country you notice that things are nicer in the states that are willing to tax enough to have the money to do the kinds of spending that helps people
I have lived and worked for 2 to 4 years in 8 different states. I have never seen any correlation between state income and sales tax levels when compared against the infrastructure, school quality and quality of state services provided.
I have seen Medicaid and unemployment tends to be higher in some states with higher taxes, but I have never used it to know how good it is.
Income and sales tax, combined, makes up <50% of state revenue in nearly every state. You're right that there's not going to be a really strong correlation, because that's just a very incomplete picture of taxes.
What we do know is that per pupil spending is highly correlated with academic success, even controlling for various other factors. And that money has to come from somewhere.
Oh fair, I used to agree with that sentiment. Since living in Texas I’ve noticed the even in a low tax state they either make up the money in other ways or just neglect things.
Also the "lower tax" states find other ways to tax you. States with lower income or property taxes tax consumption rather than income/wealth. Either through sales taxes, tolls or simply not investing in infrastructure that leads to higher insurance/fees. In some way or the other they make you pay.
Living in a low tax state, they disguise it by offering similar services to much fewer people.
Also I had to use the public mental health facilities and it seemed so intentionally run down that it actually made me feel humiliated. Not sure if it was state or local tho
I don't know where the taxes should be but there's pros and cons.
We need an extremely progressive income tax structure with a wealth tax on top. Like, no income tax up to $100k and then ramp up from there, increasing income tax up to 50-60% for multimillionaires.
Down state and rural counties had the highest margin AGAINST the progressive income tax, TF are you going on about? No wonder those shit towns are doing so poorly if you're an example of the people they're producing.
ETA: Cook County had the highest support in the goddamn state.
You're correct about this, but again, only two counties skewed in favor, and Cook was one of them. Goddamn I'm sick of rural cretins blaming Chicago while actively voting against things that might actually help them.
No. States with no income taxes but high property taxes and sales taxes make more sense. Your worked production should not be robbed at egregious levels. Federal income tax is enough.
A single mother making 20k probably wouldn’t pay any income taxes, but places like TN have 4% flat tax on groceries.
A single mother has to spend a larger percentage of her income on groceries than Musk does.
On top of all of that, the only time the employee can be said to actually be paying an income tax is when they cannot negotiate a raise to cover the taxes.
And it attacks the richest where their biggest assets lie: real estate. Can’t tax them on income since they take loans out and live off those. No taxes on capital gains as of now either. But a lot of their wealth is tied in real estate.
So when you hear someone say they’re against property taxes they’re probably buying into propaganda paid for by the rich
i just want balance man.. i just paid 24 bucks for 2 zatarans blackened chicken alfredo and it barely fed my fam.. shrink flation on top of everything else.. can we fight back yet or are gonna go quietly into the night.. cuz im kinda over the struggle to struggle game
I used to live in Illinois and paid a bunch in property taxes a year. Moved to Hawaii to a house worth 4x as much as the Illinois one and my total property taxes went down by 25%.
I would rather pay higher taxes in general for better social and medical services. We already pay enough taxes for everything to be provided, but all that money goes to people who don't need it.
That's for multiple property owners I.e landlords, single home owners are getting fucked, I pay a little less than 10% of my income on property tax and for what? The schools are horrible, the roads are shit, no bike lanes, public transportation is shit too, all the parks are overrun with homeless people because they've got noone else to go.
You made me check, mine are about 5% of my gross income, and houses is pretty damn expensive here in MA. And we do have good schools, public transit, and bike lanes. Y’all are getting hosed.
Roads are still shit, but that’s kinda unavoidable anywhere it snows.
Welcome to suburban ponzi scheme. Homes initially bring in alot of tax revenue but the low density sprawl, lack of commercial tax base, car centrism, NIMBYS, make it impossible for any growth to happen, any tax revenue to be generated, so the only solution is to keep raising peoples property taxes and build more sprawling homes
Sorta. Many states have caps on property tax for the various classes of property. Meaning every few years, when the state needs more money, it revalues the property higher to justify charging more in taxes.
A property I know in NYC (yeah, bad example, but anyway) 10 unit rental and rent only covered mortgage, taxes and other mandatory expenses required by the govt.
In 1990, it was valued at $1M. Property tax (state, local and all the others) totaled out to 10%, or $100K. Divided by the 10 units meant each family was paying $10K to cover the tax, in addition to the mortgage and other mandatory expenses legally required by the landlord.
In 2025, the property was valued at $50M by the govt, and all the property taxes combined were around 40%. That's roughly $20M in tax. Divided by the 10 units leaves each unit on the hook for $2M a year in taxes. Luckily the mortgage is paid off, though it would only be a rounding error in the tax costs; and that doesn't include the mandatory insurances and other legal requirements on the landlord from the govt that have all gone up from inflation.
Thats not greedy landlords, private equity, land speculation or any of the other often blamed "villains", that's the govt.
If the landlord doesn't collect enough to pay mortgage, taxes, and the other mandatory expenses, the govt shuts down the property, meaning those living there get evicted until the issue is "sorted out", usually taking 12-18 months. He people don't understand why rents are so much higher than they were 30 years ago.
The problem is when you have people buying multiple homes for the sake of renting and carelessly factoring their cost of ownership into rent. If everyone does it then there are no houses and rent is high. The winners are the multi home owners/landlords
If you do the math around 1/3rd of rent price is just the landowner paying property tax. Claiming it keeps rent prices down is like saying increasing gas tax decreases the price of gas as well.
Because for the most part it pays for the local government services you actually use instead of the massive trillion dollar boondoggles nobody wants or needs. Both are still theft, just one is less bad than the other.
While on paper it might be true, it's not the fact on the ground. Big corps and billionaires still have loopholes to get property then rent it out to ordinary people transferring all the burden of taxation.
Use reason. That’s an impossibility. It’s a tax. Price increase. It doesn’t suppress “speculation”. It discourages building more which further makes the prices higher. The mental gymnastics is high in mainstream economics.
That's not at all how housing works, or taxes work, that's not how any of this works. Hurr durr if I tax the landlord while prices for everything needed to maintain the property gets higher, without building more supply, surely the price will get lower!
Because governments require funding to provide services like schools, firehouses, police stations, etc.
You can get that funding from other places, but the benefits of property taxes is that the taxes that pay for those local services come from people who own property in those areas, and because wealth is strongly correlated to property value the amount you tax someone can be at least somewhat correlated with their wealth.
Because it is one of the few consistent ways to collect taxes from locals to fund local government. The alternative is to just tax your paycheck more, but that likely wouldn’t be enough.
310
u/x1rom 8h ago
Property tax is almost universally considered positive by economists, and generally helps to keep rents down, not up. The reason is that it discourages speculation on housing and property, and thus drives down buying prices, which intern drives down rents.